Mobile County Commission to vote on bond issue for ThyssenKrupp incentive money

Mike Kittrell/Staff PhotographerThe hot strip mill is shown under construction at the ThyssenKrupp site in Calvert last month. The Mobile County Commission is set to vote Monday on a bond issue to provide $13.5 million in incentives for the huge steel mill.

MOBILE, Ala. -- The Mobile County Commission is poised to decide Monday whether to approve a $13.5 million bond issue to fulfill the county's share of the incentive package for German steelmaker ThyssenKrupp.

Two years ago, Commissioner Stephen Nodine said that the county didn't owe the money, a position he reiterated Friday.

In a statement, he said, "Mobile County has paid its fair share. It has paid what it obligated itself to pay. The Mobile County Commission is now being pressured to contribute additional funds despite clear contractual terms to the contrary. What is taking place here is nothing short of a shakedown from the state."

Nodine originally said he would reserve comment on the bond issue until Monday's meeting. But at the end of the statement, Nodine said, "I will not support paying an additional $13.5 million to the state."

Nodine also sent a separate e-mail saying that in a conversation he had with Gov. Bob Riley, the governor said the state would pay the incentive instead and ThyssenKrupp would write it off.

"I can confirm the state will absolutely not allow Mobile County to renege on the obligation it has made," Riley's spokesman Jeff Emerson said via e-mail. "ThyssenKrupp has not said it is going to write that off."

Local and state governments put together an incentive package of more than $811 million in cash, other incentives and tax breaks to encourage ThyssenKrupp to build its massive steel plant in south Alabama.

Nodine signed an agreement stating the county owed as much as $83.5 million of those incentives. In June 2007, Nodine said he had a verbal commitment from state officials that the state would pay $13.5 million of that, leaving Mobile County to pay $70 million.

State leaders believed then, as now, that Mobile County owes the $13.5 million, Neal Wade, director of the Alabama Development Office, said Friday.

The governor "has talked to them through this process to make sure that they believe that they owe the $13.5 million, and the comment and the response he has gotten from the them has been, 'Yes, we do owe the money,'" Wade said.

"It has certainly been the state's position since they signed the agreement that the local government did owe the $13.5 million," Wade said. "This issue has to be resolved because ThyssenKrupp had done what they need to do. They spent the money and they have to be paid. The state is the administrator of the contract, and it is our responsibility to make sure that everyone who signed is living up to what they agreed to do."

Commission President Mike Dean said Friday that he will support the bond issue "if we defer for five years and let some of the debt service (on previous bond issues) roll off."

"We've got a couple of options that we can do," Dean said. "Every county in the state is having difficulty in this economy. I wish the governor could help us out with this."

"I plan to vote for the bond issue," Commissioner Merceria Ludgood said in a Friday e-mail. "This obligation predates my tenure and is somewhat ambiguous. While there is language that suggests that a consortium is responsible for the $13.5 million, most of its members are not party to the agreement and made no promise to pay. Though not clear from the TK document, it appears that there was an expectation that the county would pay if the consortium did not."

She said, "I think Mobile stands to lose a lot more if we cannot resolve this issue. Our community benefits greatly from this project and will, even more so, when production begins and it is fully staffed."